European morning wrap-up

• German prelim Q-4 GDP fell s.a -2.1% q/q, fell -1.6% y/y n.s.a. Worse than expected.
• Germany’s Steinbruek: Germany must speak out against protectionism at G7.
• Italy’s Q-4 GDP fell -1.8% q/q, fell -2.6% y/y. Worse than expected
• Euro-zone Q-4 GDP estimated at -1.5% q/q, -1.2% y/y. Worse than consensus forecast, but not really unexpected after early worse than expected individual country numbers.
• Bank of England launches scheme to buy corporate debt.

Cable firm this morning, with sterling seeing good across the board strength. Some cite wariness ahead of G7 and possible strong negative rhetoric toward weakness in the U.K currency. EUR/USD marginally lower, euro undermined somewhat by weak GDP data. USD/JPY firmer, sources cite decent custodial demand. Generally risk aversion slightly improved, hopes for US govt programme to subsidize mortgages helping. European stocks posted gains.